ICASA guns for unlicensed WISPs

The Independent Communications Authority of SA (ICASA) has vowed to crack down on wireless Internet service providers (WISPs) that operate without a licence or allocated spectrum.

Click on link above to read more

For opinions and advice on above topic - call us at Van Gaalen Attorneys

Mobile subscriber registration almost law

The National Assembly yesterday passed amendments to the monitoring of communications law.The amendments mandate cellular operators to register all prepaid customers within one year and that all visitors must register their cellphones. SA's estimated 38 million cellphone subscribers largely consist of prepaid users.

Click on link above to read more

Who Knows What Evil Lurks in the Hearts of Disloyal Employees?

The Shadow may know, but some courts couldn't care less. Employers increasingly use the Computer Fraud and Abuse Act (CFAA) to seek redress against former employees that pilfered company data. Courts have split, however, on whether a former employee's improper use of company information is enough to make out a CFAA claim. As we have previously reported, several courts have held that an employee who accessed information for an improper purpose -- such as his personal benefit or that of his employer's competitor -- acted "without authorization" or "exceed[ed his] authorized access" within the meaning of the Act. But a few courts have gone the other way. Most recently, a federal court in Pennsylvania ruled in Brett Senior & Associates v. Fitzgerald that a former employee's allegedly unauthorized use of client files did not establish that the employee exceeded his authorized access when he took the files.

© Copyright 2007 Steptoe & Johnson LLP. Steptoe & Johnson LLP

German Court Rules that Skype Violated Open Source License

Open source software (OSS) is big right now. Part of what makes OSS so attractive is its licensing structure. OSS licenses require that software source code (i.e., the version that can be read and changed by human programmers) must be made publicly available, and most OSS licenses -- including the most popular, known as the GNU General Public License (GPL) -- require anyone who distributes a program based on OSS must likewise make their changes publicly available. Many companies have discovered that using OSS code in their products makes good business sense. But using OSS software in a commercial product can also create legal complications. A case in point is a German court ruling (see case summary) that distribution of an OSS mobile phone using the Skype software without a copy of the GPL or source code violated the license's terms.

© Copyright 2007 Steptoe & Johnson LLP. Steptoe & Johnson LLP

Amendments – Notices required

In the first U.S. appellate court decision to address the issue, the Ninth Circuit has ruled that a provider of long distance phone service may not change the terms of its service contract "by merely posting a revised contract on its website." Since the provider did not show that it had given the subscriber any notice other than the posting, the Ninth Circuit struck down a lower court's order to compel arbitration based on a clause of the modified contract. The court's ruling sets an important precedent, and highlights the importance of giving subscribers clear and prompt notice of all contractual revisions.

© Copyright 2007 Steptoe & Johnson LLP. Steptoe & Johnson LLP

ISPs to prevent copyright infringement

The Belgian Court of First Instance in Brussels ruled late last month that a local Internet service provider must take certain proactive measures to block or filter peer-to-peer downloading of pirated audio and video files. The court's ruling was based on the European Union's Information Society Directive, which requires member states to "ensure that rightholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe a copyright or related right." The ISP must begin using technology to prevent copyright infringement within six months of the ruling, or face fines of €2,500 a day for non-compliance. While recording and movie industry groups have cheered the decision, it could greatly increase in liability for Internet service providers -- especially if other courts follow Belgium's lead.

© Copyright 2007 Steptoe & Johnson LLP. Steptoe & Johnson LLP

Court Mandates Music Filtering for ISP

The Court of First Instance in Belgium issued a decision two weeks ago in a copyright infringement case brought by the Belgian music collecting society SABAM against Scarlet, an ISP formerly known as Tiscali. In the decision, the court ordered Scarlet to implement filtering within six months in order to remove copyrighted music from its network. An unnamed court-appointed expert identified several technologies -- including Audible Magic's acoustic fingerprinting -- that Scarlet could use to meet the court's requirements.

Temporary storage may not be so temporary

Data privacy and data retention are hot issues these days. While American and European legislatures and regulators wring their hands over how to balance the interests of privacy, law enforcement, and commercial imperatives, courts are not hesitating to step into the breach in unexpected ways. Last month, in Columbia Pictures Indus. v. Bunneli, a federal magistrate judge in California ordered TorrentSpy, a website that offers dot-torrent files for download by users, to preserve and produce information about users' interaction with the site, even though this information is purposely not logged but only stored temporarily in the RAM of either the TorrentSpy server, located in the Netherlands, or of servers controlled by a third-party middleman, located around the world. The ruling was based on the Federal Rules of Civil Procedure, which require litigants to retain and produce "electronically stored information" relevant to a case. The court rejected the defendants' various arguments for why retention and production should not be required – including costs, the website's privacy policy, the Stored Communications Act (SCA), the Wiretap Act, the pen register statute, the First Amendment, the potential loss of users' good will, and conflicts with Dutch data protection law. If this ruling becomes the norm in discovery, it could lead to much greater retention and production of communication records, website logs, and search terms during litigation. More broadly, if courts routinely order data retention during discovery, even where such retention is not part of a company's normal business practices, the slope leading to a broad data retention mandate seems likely to get a lot more slippery.

© Copyright 2007 Steptoe & Johnson LLP. Steptoe & Johnson LLP

Inconsistent Enforcement of Email Policies: the Employer's Hobgoblin?

Ralph Waldo Emerson famously wrote that "a foolish consistency is the hobgoblin of little minds." But, as a recent Fourth Circuit decision suggests, consistency is a good idea when it comes to enforcement of email use policies. In Media General Operations, Inc. v. National Labor Relations Board, the Fourth Circuit upheld the NLRB's finding that the Richmond Times-Dispatch, a newspaper owned by Media General, had wrongly interfered with employees' union communications. Although Media General had a policy prohibiting personal use of the company email system, the court noted that the company's enforcement of the policy was uneven, allowing a "wide variety of messages unrelated to company business" while prohibiting "union messages." Although this decision dealt with the narrow issue of labor relations, its reasoning could affect how courts treat claims by or against employees where employer monitoring of employees' communications or workers' violations of company computer policies are at issue. The lesson for employers: without uniform enforcement, an email use policy might not be very useful.

© Copyright 2007 Steptoe & Johnson LLP. Steptoe & Johnson LLP

Apparently Not All Information "Wants to Be Free"

Hackers (or "crackers") used to justify their computer break-ins with the catchy claim that "information wants to be free." But the last decade's boom in computer crime, identity theft, and digital copyright infringement has tarnished any appeal that motto once held in the popular imagination. Still, people may be surprised at just how restrictive the legal constraints are on unauthorized access to, or sharing of, information. For example, people who inappropriately share an individual user code and password to access an online publication may not only be infringing a copyright, but may also be guilty of a crime. That, anyway, is the upshot of the decision by a federal court in California in Therapeutic Research Faculty v. NBTY, Inc. In that case, the court refused to dismiss civil claims brought against defendants who allegedly abused a limited subscription to a copyrighted medical database. The plaintiff claimed violation of the Copyright Act, the Computer Fraud and Abuse Act, and the Electronic Communications Privacy Act. For companies that use licensing agreements to manage their provision of copyrighted material over the Internet, the ruling may provide additional ammunition for going after unscrupulous licensees. Moreover, since those statutes also provide the basis for criminal liability, the court's reasoning means that those who abuse a subscription to an online publication may not only be civilly liable, but could -- at least in theory -- be subject to prosecution as well.

© Copyright 2007 Steptoe & Johnson LLP. Steptoe & Johnson LLP

Hack Attacks on Mobile Banking to Rise Sharply

This year could see a sharp rise in hacker attacks on Internet-enabled smart phones as a number of new banking and payment initiatives enter the mobile channel, a research group warned Monday.

Court turns back on Antitrust Claims against Verisign and ICANN

Currently, if a company wishes to register a .com or .net domain, the registrar who secures the domain on the company’s behalf must file a registration request with VeriSign, Inc., the registry operator that the Internet Corporation for Assigned Names and Numbers (ICANN) has granted sole rights to those domains. So when VeriSign secured -- without competitive bidding -- a five-year extension to its control over .com domains which permitted price increases for domain registrations, a coalition of Internet domain registrars, registrants and back order service providers known as the Coalition For ICANN Transparency Inc. (CFIT) filed suit against VeriSign and ICANN in federal court in California. The suit alleged that VeriSign had monopolized the markets for the registration of both new and expiring .com and .net domains and that VeriSign had conspired with ICANN to monopolize and restrain trade in these markets. Late last year, the court dismissed these claims, finding that no monopolizable separate market existed for expired domain names, and that CFIT had not shown that an antitrust injury had occurred.

© Copyright 2006 Steptoe & Johnson LLP. Steptoe & Johnson LLP

Aussies and Yanks Agree: Linker Beware

"Caveat emptor" (or "buyer beware") has long been a guiding principle for consumers. But as more business -- and copyrighted content -- moves online, mavens of e-commerce might want to formulate an additional maxim: "caveat linker." As recent decisions in the United States and Australia demonstrate, webmasters -- and, in some cases, the Internet service providers that host their sites -- have several reasons to link with care. In Live Nation Motor Sports, Inc. v. Davis, a federal court in Texas held that by including links to live audio webcasts owned by Live Nation on his website, the defendant had likely infringed upon the plaintiff’s copyright. And in Cooper v. Universal Music Australia Pty Ltd., the Federal Court of Australia upheld a judge’s ruling, on which we reported earlier, that a website operator and his ISP had "authorized" copyright infringement by linking to third-party sites that hosted pirated music files. These two decisions suggest that webmasters and ISPs should be wary when linking to content, particularly if they suspect that it may be copyrighted.

© Copyright 2006 Steptoe & Johnson LLP. Steptoe & Johnson LLP